U.S. lauds China's measured response to Taiwan arms

BALI, Indonesia (Reuters) - U.S. Defense Secretary Leon Panetta on Sunday lauded China for its measured reaction to the latest U.S. arms sales to Taiwan, which has triggered harsh words from Beijing but, at least so far, apparently nothing else.

Past U.S. arms sales to Taiwan have prompted Beijing to temporarily cut-off ties with the U.S. military, as happened after last year's $6.4 billion arms package. China deems the self-ruled island an illegitimate breakaway from Beijing's rule that must accept eventual reunification.

But last month's U.S. announcement of a $5.85 billion arms package for Taiwan, including upgrades to F-16 A/B fighter aircraft, has been different, Panetta said.

"I've heard nothing that indicates that they're taking any steps in reaction to that," Panetta told reporters on the Indonesian resort island of Bali, where he will meet Southeast Asian defense ministers later on Sunday.

"As a matter of fact, I guess I would commend them for the way they've handled the news of that sale to Taiwan ... I think they handled it in a professional and diplomatic way -- and we appreciate that."

Panetta suggested a U.S. informal "heads up" to Beijing before the public announcement of the sale may have played a role. He said he hoped to visit China as soon as possible -- but added he had no timeline yet to do so.

Panetta's comments on China came during his first trip to Asia since taking over the Pentagon's top job in July, and at a moment of uncertainty in the region over the implications of China's military buildup and its territorial disputes in the South China Sea.

U.S. DEFENSE SPENDING CUTS

Chinese military advances come as the U.S. Congress is cutting the Pentagon's budget, and Panetta, who is due to visit Japan on Monday, acknowledged concerns among U.S. allies in the region that America's belt-tightening could affect its military's posture in the Pacific.

"There's no question that those concerns have been expressed. And the purpose of my visit is to make very clear to this region, and to our allies in the Pacific, that ... the Pacific will remain a key priority," Panetta, a former CIA director, said.

The U.S. military is facing at least $450 billion in defense spending cuts over the next decade, and some U.S. lawmakers have seized upon China's buildup as one of the reasons to oppose further reductions.

Speaking to U.S. forces in Italy earlier this month, Panetta cited his concerns about China as he explained plans to keep a strong U.S. presence in the Asia-Pacific region.

"In the Pacific, we're concerned about China. The most important thing we can do is to project our force into the Pacific," he said.

"To have our carriers there, to have our fleet there, to be able to make very clear to China that we are going to protect international rights to be able to move across the oceans freely."

Panetta leaves for Japan on Monday before continuing to South Korea on Wednesday, two countries where the U.S. military has a combined total of around 80,000 troops deployed.